Bill Ackman Finds a Low-Risk Way to Play a Housing Rebound

By Avi Salzman

Bill Ackman of Pershing Square Management touted Fortune Brands Home & Security (FBHS), a maker of kitchen and security brands like Master Lock, at the Value Investing Congress in New York today. The stock spiked 5% immediately after the pick was announced.

“We think there’s immense upside potential,” said Ali Namvar, an analyst for Pershing Square who gave the presentation after Ackman’s introduction.

Fortune just went public in a spin-off from Fortune Brands Inc. this month.

The current valuation assumes almost no housing recovery in the next five years, he said. If housing starts return to more normalized levels, FBHS is poised to double or triple its EBITDA. Even without a recovery, the company has ample room to grow its margins.

“Investing in FBHS is a great low-risk way to profit from an eventual housing recovery.”

Pershing Square owns about 15% of the company, Ackman said during a Q&A afterward.

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